Investor Presentation. September 2016

Transcription

1 Investor Presentation September 2016

2 Cautionary Statement 2 By attending or reading this presentation, you acknowledge and agree to be bound by the following limitations and restrictions. This presentation has been prepared by Galp Energia, SGPS, S.A. ( Galp or the Company ) and may be amended and supplemented, but may not be relied upon for the purposes of entering into any transaction. This presentation is strictly confidential, is being distributed to a limited range of persons solely for their own information and may not (i) be distributed to the media or disclosed to any other person in any jurisdiction, nor (ii) be reproduced in any form, in whole or in part, without the prior written consent of the Company. Although the Company has taken reasonable care in preparing the information contained herein, no representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein or any other material discussed at the presentation. Neither the Company nor any of its affiliates, subsidiaries, shareholders, representatives, agents, employees or advisors shall have any liability whatsoever (including in negligence or otherwise) for any loss or liability howsoever arising from any use of this presentation or its contents or any other material discussed at the presentation or otherwise arising in connection with this presentation. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or otherwise acquire securities of the Company or any of its subsidiaries or affiliates in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever in any jurisdiction. This presentation is made to and directed only at persons (i) who are outside the United Kingdom, (ii) having professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). This presentation must not be acted or relied on by persons who are not Relevant Persons. Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly in or to the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. No securities of the Company have been registered under the United States Securities Act of 1933 or the securities laws of any state of the United States, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words believe, expect, anticipate, intends, estimate, will, may, "continue, should and similar expressions usually identify forward-looking statements. Forward-looking statements may include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; energy demand and supply; developments of Galp s markets; the impact of regulatory initiatives; and the strength of Galp s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management s examination of historical operating trends, data contained in the Company s records and other data available from third parties. Although Galp believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. No assurance, however, can be given that such expectations will prove to have been correct. Important factors that may lead to significant differences between the actual results and the statements of expectations about future events or results include the Company s business strategy, industry developments, financial market conditions, uncertainty of the results of future projects and operations, plans, objectives, expectations and intentions, among others. Such risks, uncertainties, contingencies and other important factors could cause the actual results of Galp or the industry to differ materially from those results expressed or implied in this presentation by such forward-looking statements. Actual future results, including financial and operating performance; demand growth and energy mix; Galp s production growth and mix; the amount and mix of capital expenditures; future distributions; resource additions and recoveries; project plans, timing, costs, and capacities; efficiency gains; cost savings; integration benefits; product sales and mix; production rates; and the impact of technology could differ materially due to a number of factors. These include changes in oil or gas prices or other market conditions affecting the oil, gas, and petrochemical industries; reservoir performance; timely completion of development projects; war and other political or security disturbances; changes in law or government regulation, including environmental regulations and political sanctions; the outcome of commercial negotiations; the actions of competitors and customers; unexpected technological developments; general economic conditions, including the occurrence and duration of economic recessions; unforeseen technical difficulties; and other factors. The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. Galp and its respective representatives, agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances.

3 An integrated energy player 3 52 projects Exploration & Production 701 mmboe 2P reserves 45.8 kboepd WI production 10.9 bn Market Cap 356 m Ebitda 1.6 bn Ebitda 1.3 bn Capex 7.8 k Employees Refining & Marketing 330 kbopd refining capacity mmboe processed 9.1 mton sales to direct clients 800 m Ebitda 7% ROACE 1 Gas & Power mm 3 NG/LNG sales 12,533 km NG distribution network GWh electricity sales 381 m Ebitda 1 ROACE of 7% on capital employed of 8.6 bn as of YE2015, including work in progress (non-productive assets) of 2.1 bn. All figures relate to year end 2015, except market cap shown as end of August 2016.

4 The 3E's approach 4 Execute Extract Explore Focus on delivery and profitability Unlock more value from current portfolio Screening new opportunities and portfolio management

5 5 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

6 Galp holds a unique upstream portfolio 6 Brazil 6 sanctioned projects 4 non-sanctioned projects 17 exploration licenses Santos basin (8) Potiguar basin (7) Barreirinhas basin (4) Parnaíba basin (4) Pernambuco basin (2) Amazonas basin (1) Sergipe Alagoas (1) São Tomé and Príncipe 1 exploration license Namibia 2 exploration licenses Op. Op. Op. Op. Portugal 7 exploration licenses East Timor 1 exploration license Mozambique 2 non-sanctioned projects Angola 5 sanctioned projects 1 non-sanctioned project 6 exploration licenses Op. Operated

7 Africa South America Executing world-class projects FPSO #1 (CAR) Lula Pilot (100 kbopd) FPSO #2 (CPY) Lula NE (120 kbopd) FPSO #3 (CMB) Iracema South (150 kbopd) FPSO #4 (CIT) Iracema North (150 kbopd) FPSO #5 (CMR) Lula Alto (150 kbopd) FPSO #6 (CSQ) Lula Central (150 kbopd) Kuito field 1 Block 14 BBLT CPT Block 14 (100 kbopd) TL CPT Block 14 (130 kbopd) Lianzi field Block 14k (through BBLT CPT) 1 Kuito FPSO decommissioned during 2013.

8 Africa South America and further to be delivered Lula South Replicant FPSO 150 kbopd Lula Ext South Replicant FPSO 150 kbopd Lula North Replicant FPSO 150 kbopd Atapu South Replicant FPSO 150 kbopd Sépia Leased FPSO Lula West Atapu North Replicant FPSO 150 kbopd Carcará Berbigão/Sururu Replicant FPSO 150 kbopd Júpiter Kaombo North 125 kbopd Kaombo South 125 kbopd Coral Mamba Note: Galp s view as provided at CMD 2016.

9 Premium assets delivering production growth 9 Working interest production (kboepd) Execute + Extract Sanctioned Projects Execute + Extract + Explore Breakeven <$30/bbl 35-40% CAGR % E 2020E Pre-sanctioned Upside/ Exploration Potential Note: Breakeven NPV10.

10 Investing in competitive upstream projects 10 Technical costs 1 ($/boe) < 20 Reservoir characteristics and project scale driving Brazil technical costs close to $15/boe Potential from further capex and cost optimisation Lifting costs expected to be under $5/boe by E Lifting costs Leasing costs DD&A 1 Technical costs based on group working interest production (excludes royalties, overheads and oil taxes).

11 Lula/Iracema: delivering a world-class project 11 BM-S-11: Lula/Iracema Six out of 10 FPSOs producing in wells drilled out of c.150 planned Consortium technical skills and experience supporting the development of this key asset

12 Lula/Iracema: outstanding productivity 12 Top pre-salt producer wells 1 (kboepd) FPSO #1 production (kbopd) Oil recovery factor (%) Lula Lula Sapinhoá Lula Jubarte Lula Sapinhoá Sapinhoá Lula Lula Lula Lula Plateau 7 years E PoD 2010 Actual + Forecast 28% Current recovery factor 40% Ambition 2 Each 1 p.p. increase in oil recovery results in incremental c.200 mmbbl gross 1 Source: ANP Jun Note: Galp view.

13 Increasing efficiency in Lula/Iracema 13 Drilling and completion (#days) Ramp-up period of Lula/Iracema FPSOs (#months) Best performance and LT ambition Benefiting from learning curve and optimising well designs Negotiating rig and subsea contracts FPSO #1 FPSO #2 FPSO #3 FPSO #4 FPSO #4 full ramp-up expected during 3Q16, after connection to gas export network FPSO #5 and FPSO #6 to reach full capacity during 2017

14 De-risking other relevant projects in Brazil 14 Berbigão Sururu Atapu Carcará Júpiter Sépia East 1 Significant resource base in a challenging heterogeneous reservoir Production in Atapu South and Berbigão/Sururu expected by 2018 DST in Carcará North proved excellent reservoir productivity DoC expected to be submitted in 2018 Extension of the discovery into open area to the North Sépia East DoC submitted and unitisation with Sépia (ToR, 100% Petrobras) being prepared Júpiter appraisal campaign proved large oil, natural gas and condensates base, with DoC extended until Petrobras announced the farm-out to Statoil in July 16.

15 Mozambique: Optimising initial development solutions 15 Area 4 Area 4 total GIIP volumes of c.85 Tcf Dry gas in high quality reservoir Mamba onshore LNG - 2x5 mtpa LNG trains (1 st phase) Unitisation process with Area 1 concluded in 2015 Finalising framework for common facilities development EPC proposals being evaluated Coral FLNG - 1 FLNG ( mtpa) EPCIC contract under negotiation LNG long-term gas offtake contract being finalised PoD approved in February 2016

16 Angola: Optimising development projects 16 Blocks 14/14k Block 32 Four producing areas and two CPT platforms Lianzi production started during 2015 Implementation of cost reduction initiatives Ongoing drilling campaign Two FPSO of 125 kbopd expected for 2017 and 2018 PSA fiscal terms renegotiated during 2015 and potential for further cost reduction

17 17 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

18 An efficient refining system capable of meeting market needs 18 Production profile and consumption in Iberia Fully invested and competitive refining system after 1.4 bn upgrade 26% 14% Focus on maximising energy efficiency and optimising refining processes to achieve higher refining margin 69% 83% Leveraging refineries location (European SW), namely competitiveness to the U.S. market 5% 3% Galp production yields Iberian oil market Others Middle distillates Light distillates

19 3 rd largest player in Iberia and a growing presence in Africa 19 Service station in Portugal 1,435 service stations, of which 138 service stations across the African continent Annual oil sales to direct clients of 9.1 mton, of which around 8% sold in Africa Improving refining and marketing integration Stable contribution to Ebitda Launched innovative tri-fuel offer in Iberia (oil products, gas and electricity)

20 Downstream efficiency and margin optimisation 20 Galp refining margin improvements ($/bbl) Additional cost reduction in R&M ( m) before Improvements improvements impact (2018+) 2020E Previous target by delivered efficiency Further efficiency New target by 2020 Benchmark refining margin

21 Building a sustainable NG and LNG portfolio 21 NG and LNG portfolio breakdown (bcm) Spot Portfolio ambition Other Network trading Expand and leverage client base Diversify and increase sourcing Contracted pipeline 2015 volumes Medium-term structured sales Grow medium-term structured sales Contracted LNG 7.7 bcm NG Iberia demand Sourcing Sales

22 Steady contribution from regulated activities 22 NG Infrastructure Power Extensive infrastructure in Iberia with regulated gas distribution network and stakes in Iberian pipelines RAB of 1.05 bn, with 6.2% RoR between Jul 16 Jul MW of cogeneration capacity installed and expected c.4 TWh/yr of electrical power generation 3 TWh of electricity sold to direct clients in Iberia

23 Ring fencing regulated gas infrastructure business 23 Transaction structure June 30, 2016 Galp Energia, SGPS, SA Total Assets: 13.0 bn Net Debt: 2.5 bn (GGND fully consolidated) Galp Energia, SGPS, SA Total Assets: 11.7 bn Net Debt: 1.8 bn Shareholder loans 568 m 0 m Galp Gás Natural Distribuição (GGND) Total Assets: 1.3 bn Net Debt 1 : 0.6 bn Equity 100% 77.5% Highlights Marubeni led consortium with Toho Gas to acquire a stake of 22.5% in GGND Shared governance leading to accounting deconsolidation 138 m equity transaction, implying c. 1.3 bn EV, a 27% premium over RAB and 11.5x Ebitda 2016E multiple GGND to raise own funding to repay existing shareholder loans Total cash proceeds of c. 700 m to Galp at completion About GGND Holding of nine local distribution concessionaries 1.05 bn Regulated Asset Base, with RoR of 6.2% for the period Jul 16 - Jul 17 1 GGND will raise stand-alone funding to reimburse existing shareholder loans of 568 m.

24 24 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

25 Capex plan focused on developing key projects 25 Capex profile ( bn) 1.5 Group capex E capex estimated at bn E&P to account for c.85% of Group capex E&P Brazil development First stage of BM-S-11 in Brazil to drive short term investments E&P Mozambique Potential capex reduction from greater efficiency and contract renegotiation E 2017E 2018E 2019E 2020E Expected 2016 capex of bn

26 Capex flexibility 26 Capex allocation E&P uncommitted Around 60% of E&P capex already committed and focused on Brazil and Angola developments E&P uncommitted capex relates to nonsanctioned projects with production to start after 2020 E&A 1 capex accounting for 15% of E&P investment and more intensive from 2019 onwards Downstream and gas capex mostly for energy efficiency projects and process optimisation E&P excl. Mozambique E&P Mozambique D&G 1 E&A Exploration & Appraisal. Note: E&P committed capex considers Lula/Iracema and Iara in Brazil, Blocks 32 and 14/14k in Angola, and 2016 E&A.

27 Group Ebitda CAGR of 15% 27 E&P Ebitda ( m) D&G Ebitda ( m) 2,250 1,500 R&M G&P 1 Ebitda CAGR >40% 1,500 1, E 2017E 2018E 2019E 2020E E 2017E 2018E 2019E 2020E 2016 Group Ebitda expected at bn 1 G&P Ebitda does not consider sale of regulated infrastructure.

28 Free cash flow breakeven during Galp free cash flow 1 ( m) 600 FCF positive during 2018, assuming committed and uncommitted capex Testing at $45/bbl, FCF positive one year later, assuming no further capex reduction 0 Brazil FCF positive during 2017 at $45/bbl E 2017E 2018E 2019E 2020E Base case Brent $45/bbl Further upsides expected from upstream learning curve, higher productivity and contract renegotiation Positive FCF of 215 m in 1H16 post-dividend and before expansion capex 1 IFRS post interest, taxes and dividends and excluding Sinopec reimbursements. Note: Does not consider sale of regulated infrastructure.

29 Galp fully funded 29 Sources and uses ( bn) Net Debt to Ebitda 3 Base case Brent $45/bbl 12 NG Inf. cash in Liquidity 1 Not committed 3.0x 8 Capex 2.0x 4 CFFO Dividends 2 post-tax Debt service 1.0x 0 Sources Uses 0.0x E 2017E 2018E 2019E 2020E 1 Liquidity as of June 2016, including cash of 0.9 bn, credit lines of 1.2 bn and loan to Sinopec of 0.6 bn. 2 Assumes DPS, related to 2015 fiscal year, and 0.50 flat DPS from 2016 onwards. 3 Ratio considers net debt plus Sinopec MLT Shareholder Loan to Petrogal Brasil minus loan to Sinopec. Does not consider sale of regulated infrastructure.

30 30 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

31 Galp in the capital markets 31 Galp shareholding structure Free float evolution 7% 55% Free Float o.w.: 2% - 5% 55% 62% 38% 2% - 5% 2% - 5% 23% Geographic dispersion of institutional investors 1 : North America Europe RoW Free (IPO) Free 2016 Potential Free 34% 57% 5% 1 According to best available information, as of end of Note: Parpública s 7% stake placed through exchangeable bonds.

32 Adding value to shareholders 32 Last 12-month share performance (%) Total shareholder return since Galp IPO 1 (%) 51% 11% 16% 13% 10% 6% -1% 2% 1% 0% -5% European Majors SXEP European Integrated European E&P European Refiners European Majors European Refiners European Integrated European E&P Source: Bloomberg. 1 Total shareholder return from October 23, 2006 to end August European E&P: Africa Oil, Cairn, DNO, ENQuest, Genel, Lundin, Ophir, Premier, Soco and Tullow; European Integrated: Eni, MOL, OMV, Repsol and Statoil; European Majors: BP, Shell and Total; European refiners: Hellenic Petroleum, Lotos, MOH, Neste, Orlen, Saras and Turkish Petroleum.

33 Commitment to shareholder remuneration 33 Galp DPS ( /share) Current policy of 20% p.a. dividend growth until 2016 Business plan assumes 0.50/sh flat from 2017 onwards E

34 A corporate governance model which promotes transparency 34 Governing bodies General Shareholders Meeting The board of directors is composed of 19 members of which seven are executive members Remuneration Committee Company Secretary Board of Directors Supervisory Board Statutory Auditor Of the 12 non-executive directors, five are considered independent directors based on the independency criteria established by the Portuguese Securities Market Commission (CMVM) A robust supervisory framework including the Supervisory Board and the Statutory Auditor Executive Committee

35 A focused and experienced executive team 35 Chief Executive Officer Carlos Gomes da Silva Over 25 years of experience in different industries, including Oil & Gas, energy and beverages. Member of Board of Directors of Galp since 2007 Chief Financial Officer COO Exploration & Production COO Supply, Refining & Planning COO Iberian Oil Marketing & International Oil COO Gas & Power Chief Corporate Officer / New Energies Filipe Silva Thore E.Kristiansen Carlos Silva Tiago Câmara Pestana Pedro Ricardo Carlos Costa Pina Former CEO of Deutsche Bank in Portugal Held positions as Senior Vice President of Statoil for South America and was also Chairman of Statoil Brasil More than 20 years of professional experience in the areas of procurement and engineering in the automotive, hospitality and Oil & Gas industries Former CEO of Dia Portugal, which operates 640 stores in mainland Portugal Over 20 years of experience in the Gas sector. Previously responsible for supply and trading of natural gas Former Secretary of State for Treasury and Finance and member of the BoD of the Portuguese Securities Market Commission

36 Galp corporate sustainability recognised internationally 36 Galp s acknowledgements Galp was included for the forth consecutive year in the Iberia 125 CDLI 1 by the Carbon Disclosure Project in 2015 Presence in the DJSI Europe and DJSI World for the third consecutive year Considered one of the 100 most sustainable companies in the world by Corporate Knights, occupying the 30th place in the general ranking and the 2nd best in the sector 1 Climate Change Disclosure Leadership Index.

37 37 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

38 Key takeaways 38 Competitive position Unique growth profile Financial discipline <$30/bbl Projects breakeven 25-30% Production CAGR % Capex reduction 1 Resilient Integrated profile 15% Ebitda CAGR x Net debt/ Ebitda@2020 FCF>0 During 15% Commitment to shareholder remuneration 1 From financial outlook presented in the CMD in Mar-15 to the one published in the CMD Mar-16.

39 39 Developing highly competitive upstream projects Extracting value from downstream and gas businesses Committed to a solid capital structure Delivering long term value to stakeholders Key takeaways Appendix

40 Key operating indicators 40 2Q16 2Q15 2Q16 YoY 1H15 1H16 YoY Exploration & Production % Average working interest production 2 (kboepd) % % Oil production (kbopd) % % Average net entitlement production 2 (kboepd) % (3%) Angola (1%) % Brazil % (28%) Average realised sale price 3 (USD/boe) (38%) % Production costs (USD/boe) (3%) Refining & Marketing (37%) Galp refining margin (USD/boe) (35%) % Refining cash cost 4 (USD/boe) % (12%) Raw materials processed (mmboe) (8%) (4%) Total refined product sales (mton) (4%) (2%) Sales to direct clients (mton) (3%) Gas & Power 1,860 1,869 1,593 (15%) NG supply total sales volumes (mm 3 ) 4,064 3,454 (15%) (4%) Sales to direct clients (mm 3 ) 1,918 1,782 (7%) (25%) Trading (mm 3 ) 2,146 1,672 (22%) 1,192 1,120 1,229 10% Sales of electricity (GWh) 2,247 2,421 8% 1 Unit figures based on net entitlement production. 2 Includes natural gas exported, excludes natural gas used or reinjected. 3 Galp average oil and gas realised sale price, including change in production effects. 4 Excluding impact of refining margin hedging operations.

41 Maintaining solid capital structure 41 Profit & Loss ( m) Balance Sheet¹ ( m) 1Q16 2Q15 2Q16 QoQ YoY 1H16 YoY Turnover 2,829 4,247 3, % (23%) 6,095 (25%) Ebitda % (25%) 631 (23%) E&P % (27%) 135 (37%) R&M (3%) (38%) 291 (22%) G&P % +10% 187 (15%) Ebit % (39%) 323 (39%) Associates % +42% 45 +5% Financial results 3 (10) 15 n.m. n.m. 18 n.m. Taxes 1 (39) (107) (79) +100% (26%) (118) (34%) Non-controlling interests (9) (15) (12) +41% (16%) (21) (19%) Net Income % (29%) 247 (20%) Net Income (IFRS) (58) n.m. (40%) 8 (89%) Dec.2015 Jun.2016 Jun-Dec Net fixed assets 7,892 7,304 (588) Work in progress 2,077 2, Working capital (145) Loan to Sinopec (147) Other assets (liabilities) (515) (335) +180 Non-current assets/liabilities held for sale Capital employed 8,610 8, Net debt 3 2,422 2, Equity 6,188 6, Net Debt + Equity 8,610 8, IFRS Figures. 2 Does not include loan to Sinopec as cash.

42 Balanced debt profile 42 Debt June 2016 ( bn) Reimbursement profile ( m) June 2016 YE2015 Public bonds Private placements Multilaterals 300 Bank loans Gross debt Cash Loan to Sinopec Net debt Maintaining diversified sources of funding and reducing average cost c.60% Average maturity of 2.7 years

43 Key indicators on Galp s debt H16 Gross debt 3.6 bn 3.4 bn Cash and equivalents 1.1 bn 0.9 bn Net Debt 2.4 bn 2.5 bn Net Debt considering loan to Sinopec as cash 1.7 bn 1.9 bn Net Debt to Ebitda Ratio 1 1.2x 1.6x Available credit lines 1.1 bn 1.2 bn Average life of debt Average interest rate 3.75% 3.50% % floating rate 58% 57% 1 Ratio considers net debt plus Sinopec MLT Shareholder Loan to Petrogal Brasil minus loan to Sinopec.

44 Outlook and business plan sensitivities 44 Galp assumptions 2016E 2017E 2018E 2019E 2020E Brent price ($/bbl) Refining margin benchmark EUR:USD Ebitda sensitivities Change 2016E 2020E Brent price $5.0/bbl 90 m 210 m Refining margin benchmark 1 $1.0/bbl 90 m 95 m EUR:USD 0.05 ( 45 m) ( 115 m) 1 Benchmark refining margin = 42.5% cracking margin % hydrocracking margin + 5.5% aromatics margin + 7.0% base oils margin.

45 Galp s reserves and resources portfolio 45 Reserves and resources (mmboe) 1 Reserves % Chg. 1P % 2P % 3P % Contingent resources % Chg. 1C (8%) 2C 1,672 1,343 (20%) 3C 3,496 3,025 (13%) Exploration resources % Chg. Unrisked 1,605 1,493 (7%) Risked % 1 Exploration resources and contingent resources on a working interest basis. Reserves figures on a net entitlement basis. All figures are based on DeGolyer and MacNaughton report as of

46 Ongoing exploration activities 46 Potiguar basin (Brazil) Alentejo basin (Portugal) São Tomé and Príncipe Pitu discovery appraised during 2015 Broadband 3D seismic across five blocks expected in 2016/2017 First ever deepwater exploration well in Portugal Main targets are Lower Cretaceous and Upper Jurassic sands First operatorship in deepwaters Planning for broadband seismic 3D acquisition

47 Acronyms 47 # Number DJSI Dow Jones Sustainability Indices m Million Approximately DoC Declaration of Commerciality mmbpd Million barrels per day % Percentage DST Drill Stem Test mmboepd Million barrels of oil equivalent per day & And E Exploration mmbbl Million barrels Euros E&A Exploration and Appraisal mmboe Million barrels of oil equivalent $ (or USD) Dollars E&P Exploration and Production MSc Master of Science x Times Ebitda Earnings before interest and taxes, depreciation and amortisation mton Million tonnes 1C; 2C; 3C Contingent resources EIA U.S. Energy Information Administration mtpa Million tonnes per annum 4D Four Dimensional EOR Enhanced Oil Recovery NE Northeast 1P Proved reserves EPCIC Engineering Procurement Construction Installation Commissioning NG Natural Gas 2P Proved and probable reserves FEED Front-End Engineering Design NOCs National Oil Companies 3P Proved, probable and possible reserves FCF Free Cash Flow NPV Net Present Value A Appraisal FID Final Investment Decision NLNG Nigeria Liquefied Natural Gas ANP Agency of Petroleum, Natural Gas and Biofuels FLNG Floating Liquefied Natural Gas OPEC Organisation of the Petroleum Exporting Countries bcm Billion cubic metres FPSO Floating Production Storage Offloading Opex Operational expenditure bbl Barrel FOB Free On Board p.p. Percentage points BBLT Benguela, Belize, Lobito and Tomboco FTE Full-time Equivalent PoD Plan of development BoD Board of Directors GDP Gross Domestic Product PPSA Pré-Sal Petróleo S.A. bn Billion cubic metres GeoER Reservoir geoengineering Q&A Questions and Answers c. Circa GIIP Gas Initially in Place R&T Research and Technology Capex Capital expenditure GIIGNL International group of liquefied natural gas importers R&M Refining and Marketing CAGR Compound Annual Growth Rate HSE Health, Safety and Environment RCA Replacement Cost Adjusted CEO Chief Executive Officer ICE Intercontinental Exchange RDA Reservoir Data Acquisition Cid. Cidade IEA International Energy Agency ROACE Return on Average Capital Employed CIF Cost, Insurance and Freights IHS CERA Information Handling Services Cambridge Energy Research Associates RRR Reserve Replacement Ratio CFO Chief Financial Officer IMF International Monetary Fund ToR Transfer of Rights CNE Central North East IOR Improved Oil Recovery US United States of America CO 2 Carbon dioxide ISPG Instituto do Petróleo e Gás vs. Versus CDP Carbon Disclosure Project kboepd Thousand barrels of oil equivalent per day WAG Water alternating gas COO Chief Operating Officer kbopd Thousand barrels of oil per day YoY Year over Year D&G Downstream and Gas LatAm Latin America YE Year End DD&A Depreciation, Depletion and Amortisation LNG Liquefied Natural Gas Yr Year

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